H.R. 1177: Improve and Enhance the Work Opportunity Tax Credit Act

The Work Opportunity Tax Credit pays employers to hire from groups that often get passed over — veterans, people on food stamps, the long-term unemployed, ex-offenders, and others. It's been a federal hiring tool since 1996.

H.R. 1177 raises the basic credit from 40% to 50% of the first $6,000 in wages, lifting the maximum from $2,400 to $3,000 per hire. Then it adds a second tier: another 50% on the next $6,000, but only if the worker logs at least 400 hours. Keep someone on the job and the credit can reach $6,000.

Hiring veterans gets much more lucrative. Depending on the category, the wages an employer can count toward the credit climb to as much as $48,000 — putting up to $24,000 back on the table for hiring a disabled veteran who's been out of work six months or longer.

The bill also drops the age ceiling for SNAP recipients. Today only workers aged 18 to 39 on food stamps can qualify an employer for the credit; H.R. 1177 opens it to anyone 40 and up.

The retention tier answers a long-running criticism. Brookings has argued that the bulk of WOTC benefits flow to large companies for workers they would have hired anyway, and that the credit did little to change behavior. By tying the bigger payout to keeping workers at least 400 hours, the bill tries to reward longer-term employment rather than churn.

According to an EY analysis cited by the bill's sponsor, the program processes more than 2 million certifications a year and delivers around $1 billion in credits. The changes would apply to workers hired after December 31, 2024.